Big 3 hear reassurance -- and tough talk

The Economy in Crisis

December 16, 2008

What's happening

The Bush administration gave troubled U.S. automakers public reassurances Monday that short-term government help was in the works as a senator who is a major ally of the automotive industry suggested the aid package could reach $15 billion for two companies.

President George W. Bush said the bankruptcy of a domestic-car company would undermine the nation's economy as it grapples with a financial meltdown. General Motors Corp. and Chrysler LLC have said they could run out of cash within weeks without support from the government.

"An abrupt bankruptcy for autos could be devastating for the economy," Bush told reporters aboard Air Force One during a surprise trip to Iraq and Afghanistan. "We're now in the process of working with the stakeholders on a way forward. We're not quite ready to announce that yet."

In Detroit, the heartland of the auto industry, Democratic Sen. Carl Levin said he expects GM to get $8 billion and Chrysler $7 billion under the Bush administration's plan. He said Treasury Secretary Henry Paulson probably would be tapped as a "car czar" to oversee restructuring of the companies.

Bush would not give a precise timetable but said: "This will not be a long process because of the economic fragility of the autos."

What the leaders think

Sen. Charles Grassley, R-Iowa, knows what he wants from the Big Three auto executives: They should bow down to stockholders and apologize. "They're part of the elite of the country," said Grassley, the top Republican on the Senate Finance Committee, "and they seem to feel they don't owe anything to anybody."